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Strategies & Market Trends : Portfolio Construction -- Ignore unavailable to you. Want to Upgrade?

To: y2kate who wrote (531)	8/16/2007 10:16:26 AM
From: Paul Chiu	Respond to of 1964

kate, the last question is easy. i use the method employed by most mutual funds. my portfolio index is merely a NAV. i started with 100 back in 10/1994. on any following days if i were to add money into the portfolio or take out, i would either add or subtract the day's cashflows and then figure out the new NAV by M2M the closing prices of all securities. EXAMPLE 2 days ago, all securities worth $10,000 Index = 888 yesterday $110 was taken out yesterday $56 check was deposited yesterday all securities worth $10,000.32 so new Index would be: i) cashflow (10,000.32 - 56 + 110)/ 10,000 = 1.005432 ii) NAV 1.005432 * 888 = 892.82 this is how i have done it since 10/1994 my index was pegged at 100 10/31/1994 and it M2M at 964.311 yesterday to figure out the annualized returns, i use: in EXCEL 10/31/1994 -100 08/15/2007 +964.311 XIRR + 19.37% per year all other stuff to follow.... Paul

To: y2kate who wrote (531)	8/16/2007 2:15:49 PM
From: Paul Chiu	Read Replies (1) \| Respond to of 1964

i sold enough stock recently to withstand any margin calls. i am 1.4 times leveraged overall and 1.8 times leverage in my equities accounts. i am comfortable as i am still below 2.00 so no massive cash infusions from my short term accounts are needed. another 5-10% down, that will change. i never like to sell winners and losers are beginning to take shape, so i will sell those if cash is needed. i am lucky in that i re-negotiated my next year margin loan rates with my brokers back in June and early July, so my low rates are locked in throughout this. finally, i still do not like buying options, only selling them. at this moment as i missed the boat to sell vols, i will not chase it. i will go see a stupid funny movie later with my son as he has recovered from his 3 weeks stomach flu. THAT is more important to me at the moment.... Paul